Skip to main content

tv   Mad Money  CNBC  March 16, 2010 4:00am-5:00am EDT

4:00 am
welcome to cramerica. other people want to make friends. i'm just trying to make you a little money. my job, not just to entertain but to educate. so call me at 1-800-743-cnbc. which is it? is the stock market so hoping for some resolution, any resolution on health care, that it won't even go down despite the stories over the weekend that indicate obama's much closer to a health care victory than he was a week ago? to look at the averages with the dow closing up 17 points, s&p rallying .05% today, you have to believe it. or is the stock market oblivious, oblivious to the fact that this weekend the democratic leadership exerting pressure on all opponents from its own party changed the odds hugely in favor of obama's care passage? which is it? is it going to be passage or the blind side? i don't know. but look, for many i think it's the former.
4:01 am
the hedge and mutual fund managers i poll as part of my regular due diligence for the show simply do not believe obama and nancy pelosi have the votes. they don't believe it. they believe health care reform will be still-born. and that's why the stock market hasn't come in much to speak of and rallied today. unfortunately, i think these people will be wrong. and the congress will pass the legislation. i say unfortunately, by the way, because you know my predilection is to have the market rally because you own stocks or else you probably wouldn't be following the show. but those allied with me who think it will pass, they fall into several camps. they're a disparate lot. some of the money managers i know think the health care bill is so unpopular with voters that if it comes into law it assures the defeat of the most left-wing of the congress people and senators who are up for election this fall.
4:02 am
you know what that means. that means gridlock. and gridlock, well, that is heavenly. it means the end of the pro-labor, anti-capital agenda and the end of the -- >> the house of pain. >> gridlock's a win for bulls. others think that any certainty, even if it means health care reform passes, is preferable to this torture. >> buy buy buy! >> and the market can only go higher. once it is over and washington is off the front pages for a while. talk about hallelujah. ♪ hallelujah >> all aboard! >> still one more group, another group believes health care will pass, but they told out for a very panglossian analysis, that the stock market will be much, much higher right now if it weren't for the bill's imminent passage. perhaps as high as dow 11,000, maybe dow 12,000. they think the bad news of the health care bill is already discounted. by the way, no one thinks it's good news because no one thinks the health care itself is good news for some reasons i'll give you in a moment. these people who are thinking
4:03 am
the dow should be at 11,000, 12,000, they're sanguine because given the tremendous set of data showing a spurt in employment, solid consumer spending, as well as excellent industrial production, they think the economy's so strong they see no need to worry about health care and its small negative. they want to buy everything from kohl's to pp & g to fedex and nike, all of which did quite well today. and then there's me. i think those who believe health care reform fails are facing longer odds than they realize. i believe the bill passes. and if that happens, i think that president obama will have a newfound energy. newfound energy to push through every item of his agenda. and i think he'll feel very emboldened. that's been his style. and that includes a dramatic change in the way business is done in the country. with the balance of power switching toward a pro-labor game plan that could make it much harder to find the bull market in this country. understand, i was once a very big member of a union and did a lot of shop steward-like work.
4:04 am
i would be thrilled about this. but right now i come to you as someone who represents the stock market. and that's not good. plus, i believe that someone has to pay for this agenda, and that someone will be those who own stock, a lot of stock. in part because of favorable capital gains and dividend tax treatment, which almost certainly have to go away if we aren't going to break the federal bank. you've got to believe they're going to go away. and you know i think they're great for shareholders. that switch i believe is being ignored. and it will bring selling later in the year. why? people will try to beat any increase in capital gains tax. they'll decide that even stocks with hefty dividends aren't worth the pain when the taxes on those dividends become equal to what i think's going to be ordinary income tax levels. that's not in legislation yet. that's my prediction. in other words, much, much higher taxes for the vast majority of americans, for you if you own stock, it's not just in 401(k) or i.r.a. so that means i am basically
4:05 am
betting against the market's views here, betting against the sanguine view. now, what do i bet with? i don't own any stocks. but do i have a charitable trust. i control that. it's called i send out e-mails about it. you've heard me talk about it. and because i think the odds have shifted in favor of passage of health care i'm scaling back my stock exposure. doesn't help me on a day like today. i will get left behind. my charitable trust gets left behind on a day like today. but i can't tell you to increase your exposure to stocks while i'm paring back mine. that would make me fork-tongued, two-faced. now, look, i'm not doing anything drastic. you shouldn't do anything drastic. there still is a chance the bill could get defeated. remember there's a big group of people who bought stocks today because they think it will be. i think that would be a catastrophic loss for the president, and i simply do not believe the congressional democratic leadership will be willing to go there as they don't want to be at odds with their own party's leadership. you don't go against the dictatorship of the pelosi proletariat very lightly. given that so many money managers i poll think that the passage of health care reform
4:06 am
will result in gridlock, you know what they tell me? they tell me they are willing to take -- they're pain takers. they tell me that. they're willing to take the house of pain -- >> the house of pain. >> -- of owning stocks through the vote. now, i have to tell you, i know their personalities. i believe that if the bill passes these people will change their minds and they will become -- >> sell sell sell! >> -- sellers. why? because i think that gradually they will come conclusion that despite the strength of the data we will see a cessation in the improvement of the employment picture next year. and you know what that means. double dip. that's why i'm advising caution. double dip. you own stocks that have no dividend protection? you own stocks that have run a great deal, even apple? i think you need to be wary in the coming days. there is a tremendous complacency out there. the blind eye to washington, even after all we have learned, seems to me naive. but remember, for a charitable trust i scaled back and i'm looking at falling behind the market today because i'm more cautious than the stock market's main participants. don't worry. don't worry. no matter what, we will find positive places.
4:07 am
have we not done that for the last four years and now we're in our fifth? have we not found bull markets somewhere? i think the gold bull market will come back roaring to life. i think the foreign stocks. they tend to do well in this environment. how about the recession stocks? did you see them today? the heinzes? the kelloggs? did you see how well they did, the cokes? but there will be fewer bull markets out there. and the s&p 500 taken blindly as a whole could be a dreadful place to be. here's the bottom line. i am telling you don't get blindsided. which by the way i found very overrated. and i am a huge football fan. ask yourself whether you too think your portfolio will be unchanged in value if health care passes. if you do, if you think that certainty is positive either way, or that it will fail, i believe you are being too bullish. but you could be right. i was wrong today. you could get hurt as we get closer and closer to the vote, which i think will go the president's way. selling into strength, as i did today, for my charitable trust. remember, i own no stocks. leading up to the vote makes the most sense.
4:08 am
and that's why i reluctantly have to advocate caution at this stage of the political game. dave in texas. dave! >> caller: boo-yah from a transplanted canadian in el paso, texas. >> el paso? man, you're right in the heart of the action. what's on your mind? >> caller: thanks for everything you do for us home gamers. >> thank you. >> caller: back in the fall i purchased a couple companies, spac and american tower, which have done great. >> yes. >> caller: with cisco's recent announcement of their revolutionary crs-3 rotor does that mean each antenna on the towers will now push more data in the coming years, meaning cell phone carriers will need less space on the towers than if this router didn't exist?
4:09 am
>> dave, let me tell you something, this is the most sophisticated and perfect question that was posed to me by many managers and many viewers just last week, which is the cell phone stocks no longer as good post cisco? as i own cisco for my charitable trust,, i feel strongly that it is a revolutionary development and it will leapfrog cisco over juniper. but the cell phone companies will still need more tower space. of that, there is no doubt. cisco does not cure that particular bottleneck. do not sell. do not sell amt or sbac or crabb. those are still winners. i reiterate my buys. steve in idaho. steve. >> caller: jim, thanks for taking my call. i want to give you a gonzaga university bulldog matt bouldin's taking us to the final four, boo-yah! >> hey, let me go to my cbs sportsline bracket boo-yah right now and make some changes. thank heavens we don't have to do it till wednesday night. what's up? >> caller: i was wondering about green mountain coffee roasters. i'm a new investor, just got into it about a month ago. i know in december you suggested them. i was wondering should i wait for a pullback now with all the run-up it had or is it all still all engines go? >> you know, this is difficult. why is it difficult do you think? it's a quandary. i got to work and because of water problems i didn't use my keurig. bull, bear. bull, bear.
4:10 am
no. wrong takeaway. the keurig is a winner and once they have one they can't even part with it. buy half now, buy half lower. i am surprised at the strength of the stock, only because it's been up, up, up. not surprised long term. because the keurig is revolutionary long term. and remember, it's gillette. what's gillette? you buy the razor for very little, you pay forever for the blades. has anyone seen how much those new blades are? holy cow. and they have a lot of plastic and it looks like you're getting about 40 and you're only getting five. five. like four. that's like how many "avatar" fingers. it's an "avatar" situation. let's take one more. let's go to jasmine. >> caller: boo-yah from new jersey meadow falls. >> holy cow. and the translation -- that was avatarese. >> caller: hi, jim. thank you for taking my call. i've been watching your show. what do you think about baidu? >> these guys at google i've been saying whenever google goes down, baidu will go up. baidu can go higher if the papers are right. if the papers are right and
4:11 am
google pulls the plug on china, holy cow. >> don't buy. sell, sell, sell. >> and baidu, i'll pay up 100 points. that's right. i see 100 points up side if google decides to leave china. greg in illinois. >> caller: boo-yah, jim cramer, from the city of big shoulders, chicago, illinois. >> holy cow. from the city of no electricity, englewood cliffs, new jersey. >> caller: doesn't sound too good. >> no, it's not. it's unbelievable to have to brush your teeth with bottled water before you start the show. but you know, what we're on a desert island, right? oh, no, we're in jersey. i was going to brush with a bottle of jack but the censors wouldn't let me. go ahead. >> caller: i just have a question for you.
4:12 am
as part of a diversified portfolio, i've been looking at opening up a new position in the materials sector, specifically in the specialty metals industry as a cyclical play in what looks like might be a ramp up in domestic aerospace and domestic energy production, oil, gas, nuke, et cetera. i've been looking at several small and midcap companies but mult. s of most of them seem to be way out there. do you think this area's too spooky or is this a good area for growth and do you have any suggestions? >> you know i like allegheny tech, because i do like titanium. this is win everybody in the world hates. alcoa has a gigantic aerospace -- if you go in the -- if aerospace started kicking in, those guys, you will see a quick 25% move. so i'm giving you aa instead of allegheny tech, which was my stock of the year in 2006. man, have we been doing this show for a long time. all right. don't get blindsided. honest, i'm not kidding, i thought the movie was not that great. don't get blindsided. you should sell into the strength leading up to the
4:13 am
health care vote. that's what i'm doing with my charitable trust. i'm not going to do any different. "mad money" will be right back. >> coming up, cosmetic cash? has botox finally met its match? cramer's going one on one with medicis pharmaceutical ceo to find out. and later, with nat gas deals on the rise, is this transition fuel finally ready for primetime? cramer's getting answers from devon energy's ceo on the "executive decision." all coming up on "mad money."
4:14 am
4:15 am
4:16 am
you want to know a secret? all right. the wheels of late stage capitalism, they're greased by the desire for smooth, wrinkle-free skin. and as the economy recovers more
4:17 am
and more, people will pay up -- >> they know nothing! >> well, not really. -- to look young and beautiful. after all, not every 64-year-old can look like me. now, for a long time botox, made by allergan, a stock you know we like, has been synonymous with smooth skin. but now medicis we've liked, mrx, the pepsi to allergan's coke, has come out with a new treatment called dysport that aims to give botox a run for its money. medicis launched this one in june but it just more importantly launched a big promotion at the beginning of march called the dysport challenge. listen to this. it's very interesting. already cheaper than botox but with this new marketing campaign medicis is offering a $75 rebate on a treatment with botox to anyone who feels unsatisfied with their own product. talk about a confident gesture. some of medicis sales reps have noted that dysport orders have as much as doubled from the
4:18 am
practice that's cover in the two weeks since the promotion began. we've got to find out about it. that's just one product. it also has soledyn, an antiacne drug. the patent doesn't expire till 2018 but because of settlements the company's reached with generic drugmakers impact, teva and sandos this could face drug competition as early as 2011. definitely something to be considered about. keep an eye on it. by the way, that's what keeps so many analysts from being bullish on this company. then there's the dermal filling franchise. another play on smoother skin. and also the liposonix system -- ultrasound -- sorry non-invasive technology for destroying fat cells. medicis beat wall street's consensus earnings estimates by eight cents earning 68 cents per share. serious growth. then shortly after the quarter on march 10th medicis boosted its quarterly dividend from 4 cents to 6 cents.
4:19 am
i know the yield's just 1%. but we know dividend hikes are an important sign of strength in a company. stock's had a big run since the bottom of last year, up 9.65. allergen's pretty high, too. still trading at 12 times 2011 earnings. much cheaper than allergan at 17 times earnings. even though they really have similar growth rates. although allergan's got a more diversified portfolio. plus the company has $554 million in cash on its balance sheet. just $169 million. we're talking about $9.25 of cash. a third of the share price. i think medicis could close the gap with allergan as the economy rebounds and both companies take advantage of our vanity. that said, a lot of competition in this business. so let's hear from the ceo of medicis, jonah shacknai to learn more about the company's prospects. welcome back to "mad money." >> great to be with you as always. >> terrific. there was this article in the "new york times" yesterday, in the "week in review," and it
4:20 am
said "taking a nip out of tuck." it talked about cosmetic surgeries being down, doctors blame the recession. isn't it true your medicines, your procedures for the face are a great way to be able to save money off expensive cosmetic surgery? >> it's true everything has its place in cosmetic surgery. the larger procedures are down, things like facelifts and liposuction definitely down as much as 20%, not to mention breast implants down even bigger. but the facial aesthetics for none invasive therapies like dysport is either static or up even in a down economy. so i think you're right when the economy recovers we should see a strong surge in demand for these kinds of products because they can be done in an hour, you're back to work or back to the rest of life and that's very different from general plastic surgery procedures. >> let me understand the economics of your business with
4:21 am
dysport. here's what i don't understand. if you're a doctor, okay? it would seem to me you should switch from botox if only because your customers pay less, you may not have to charge less, frankly or a liftle bit less. you save your customers money in a time when a recession is in everybody's mind. how can that not be a no-brainer for dermatologists to switch to? >> we think it's as obvious as watching your program. >> there you go. >> and everyone should be switching to dysport. that's kind of what's happening in the market. we march 1st announced the dysport challenge. you're right that we say if you don't love our product after using it then we'll give you $75 toward treatment with a competitive product. but if you love our product we'll give you $75 off the next dysport treatment. so we think every way you slice this, whether it's from the doctor's point of view or the patient's, dysport is a really compelling choice to make. >> who kim up with this? i've never heard anyone offer to pay for your number one competitor's -- i've never seen colgate pay for crest.
4:22 am
>> well, i'll start off by saying we don't expect to be writing a lot of checks for botox. >> obviously not. >> so i think it's a great challenge and we're putting our money where our mouths are, but it would surprise me if we wind up writing a lot of those checks because we think people are going to love dysport. and this is an idea that came to us. we're a very collaborative marketing team, and we're kind of fascinated to be the first in the industry with this kind of a challenge. >> just so that people understand, again, the economics if they've never had these procedures, these are not typically covered by insurance. so you're really talking about out-of-pocket money, right? >> yeah. we think the consumer wins always with dysport, whether it's with this promotion or generally with lower prices for a treatment that the fda seems to think is pretty safe and effective. and we certainly concur. >> a lot of the analysts worry your acne medicine's really your real business and all these other things we're talking about, dysport, restylane, aren't big enough. is that the way guys look at it internally? >> it isn't.
4:23 am
we look at our portfolio as being really diversified between aesthetics, which is restylane, dysport, and our acne business, which is soledyn and triaz. it's true soledyne is the largest dermatology product in the united states. there is a lot of risk invested with that. but you're right to point out it's a patented product, it's a product we think really has many years to run, and of course you're right we've entered into an arrangement, a settlement with some generic companies where they recognize our patents. but it's also true we've moved on to new strengths, new forms of soledyn and we have a pipeline for that product that probably extends out another seven to ten years. so we're excited about soledyn always being the leading dermatology product in the u.s. and we're going to work hard to make sure that happens. >> it's great you boosted the dividend, but you've always had a gigantic cash position, which is terrific. but at a time you can't make money off your cash is that not
4:24 am
a liability for you? >> i don't think it's a liability, but i think we're pretty disciplined in our approach toward acquisitions. we do probably 10 to 15 technology deals a year that are kind of below the radar and then once in a while we make a major acquisition, as when we bought liposonix about a year and a half ago. that was a $150 million deal. so certainly we're ready and able to make these larger deals but we're only going to do that if it's going to pay well for shareholders not just in a quarter or even a year but really has a good five to ten-year run rate ahead of it and that's kind of the way we look at our business. >> one last question. i may have done something that is illegal here. i went onto the site, and i was trying -- i admit, i said that i was a foreigner. okay? in order to go see this liposonix. it's this thing. domestically it's not approved now, i saw it, and i wanted to go to europe. and i'm not even that heavy. i've got to go to europe to get this thing. in seems to be one of the great -- how quickly can you get rid of fat with this thing versus
4:25 am
every other method? >> well, it's a completely non-invasive therapy. it takes about an hour. and certainly what we're finding is very reproducible results in all the markets where this is sold now, in europe and canada. and we said that we will have filed our application to the fda by the end of this month. so we're pretty excited about getting this thing marketed in the u.s. when the time comes, pending fda approval. >> memo to coach ryan, who i know watches the show, this would have been better than that incredible treatment you just had, believe me. jonah shacknai, thank you so much for coming on the show. appreciate it. >> my pleasure, jim. see you. >> jonah's a moneymaker. he always has been. he's chairman and ceo of medicis. i don't know. may have to take that challenge. but then again, for 64 years old maybe i don't need anything. maybe you take the challenge. maybe you just buy the stock. stay with cramer! >> coming up, with nat gas deals on the rise, is this transition fuel finally ready for primetime? cramer's getting answers from devon energy's ceo on the
4:26 am
"executive decision." there's only one day left until "mad money" turns 5. >> how can private industry compete with the u.s. government? >> the advantage that we have by being independent, we love where we're going with ford. we've got a complete product line. our quality and our productivity has advanced. the most important thing we do is focus on the customer and we make the cars and trucks that they absolutely love. >> "mad money" turns 5. tomorrow.
4:27 am
4:28 am
4:29 am
we are in the midst of an honest to goodness natural gas rush, the biggest, most bountiful natural resources game changer i have ever seen in my life. and nobody wants to be left out. that's when i think when i saw console energy, mainly a coal company, buying dominion resources, marcellus shale natural gas properties this very morning for $3.75 billion. when even the coal industry, which you know we call the pro black lung, anti-rainbow coalition, wants to get in on the nat gas rush, you know they don't share president obama's lady gaga style bad romance with clean coal. and with oil prices falling down below $80 a barrel today, i've got to take the opportunity to recommend a stock that is doubling down. on its north american onshore business. i'm talking about devon energy. dvn.
4:30 am
back in november of last year this international oil and gas company announced it would become a north american onshore oil and gas pure play by shedding its international roster of divisions. sure enough, devon has followed through that pronouncement. just last week we learned it's selling off all its assets in brazil, azerbaijan, and the deep water parts in the gulf of mexico to bp for a whopping 7 billion. i was expecting only 5 billion. this is on top of devon's $1.3 billion sale of three gulf mexico prospects to maersk oil in december. it's already a bigger payday than devon's bigger than its prediction. that its asset sales would bring you $1.5 to $1.7 billion. the company still has another 1.4 billion expected to come through in sales of its remaining gulf of mexico and international offshore assets. look, i know i talk about these natural gas stocks a lot but that's because something huge is happening in this industry as more companies buy up properties and we transition to using natural gas. ace bridge fuel that's clean, create hundreds of thousands of
4:31 am
job. here's one, you can make money while being good for the country. isn't that different? i am going to keep talking about stocks like devon because they keep trying to make you money and making money is never boring! this one's giving you 220% return the last ten years s&p down 7.5% during that period. 587% return the last 15 years. s&p up 134%. i think the track record is -- it just speaks for itself. devon understands the natural gas rush better than any other company out there and so does devon's ceo, larry nichols. let's hear what he thinks about the future of the industry and his company's transformation. mr. nichols, welcome back to "mad money." >> thanks. glad to see you. >> i've got to tell you when i saw you last we were at the university of oklahoma and it was absolutely clear both of us thought this country's future is going to rely on cleaner, better natural gas. since then i know i, myself, have been surprised that neither the president nor the secretary of energy, and here we are in
4:32 am
march, has really come out in favor of natural gas. are you still confident about your decision sell off some great international oil properties and make that bet on natural gas in north america? >> we're 100% confident of that. and if you look at where the public sentiment and policy leaders have gone from just a year ago, while it's true some of the people in the administration haven't yet publicly supported it, if you look at the awareness natural gas has among lots of policy members, among the national press, the "washington post" has editorialized in favor of natural gas, we made a tremendous amount of progress in the last year and we at devon are delighted with the progress we made. when we talked in november, you know, there was uncertainty about whether or not we'd get this transaction, the sale of our international and gulf done, how long it would take, how much of a purchase price. the transaction we just announced last week, higher purchase price by far than the street expected. faster than anyone expected. with one player. so we're very excited with the direction we're going.
4:33 am
>> are there many bidders for the remaining properties? >> there are lots of bidders. lot of bids are with the announcement with bp. there were lots of bidders on the properties we announced with bp. but we liked the transaction with bp because if was one deal with one company, obviously a highly reputable company that can perform on everything they say they will. and it brought us some favorable assets in the heave why oil in canada that we'd wanted to get for lightning period of time. >> amazing decision this morning by dominion to sell its marcellus shale properties, which a lot of people didn't feel were worth that much for a gigantic amount of money what i always regarded was a coal company. now, this coal company, console energy, seems to be -- in their statement they said they want to lower their risk profile. to me that meant the epa is about to come after coal and make these utilities realize they'd better start using natural gas. is that the way read the story too? >> exactly. and it's the same kind of confirmation we got when exxon announced they were buying xto. we've gotten several confirmations from companies making major moves that confirm that natural gas whether the policymakers like it or not, natural gas is the fuel of the
4:34 am
future because it is clean burning, produces about half the co-2 that coal does, and none of the nuclear waste obviously that nuclear does. so it is the future that has the potential, the reality of reducing our carbon footprint by a dramatic amount in the very near future. >> yesterday's philadelphia inquirer had a very large piece that listed everybody big in the marcellus shale. devon not on that list. should that change? >> probably not. the marcellus shale certainly an attractive place to be, and we certainly don't want to diminish that in any way. but when we looked at all the shale plays and where we could grow production the fastest and grow it with the least amount of political problems, it was not high on our list. we had so much opportunities in places where we'd already established a position. of course the barnett shale, which we have well over 7,000 undrilled locations yet to drill, a lot of other companies are already maxed out there as
4:35 am
well as the hainesville and canada and a variety of areas in the western united states where we think we can grow on a more profitable basis than starting in marcellus. >> one of the analysts today on wall street downgraded the group, downgraded aubrey mcclendon's stock, chesapeake. it's all about your concerns about the price of natural gas. is that how we should be thinking about your companies because if that's the cast shouldn't we be selling all of them? >> if you wanted to look at the price for the very near term, the next few months, we're always in the part of the cycle where the winter heating season is over and summer air-conditioning demand for natural gas has not yet started, we don't flow whether or not natural gas gas is going to decline in the next several months. so there is uncertainty out there. but that's just an opportunity for investors to take advantage. a very temporary weakness in the market.
4:36 am
>> you think oil prices too high? >> i think oil prices are where they ought to be, reflecting the world demand for oil particularly in china. and the strip market indicates that with oil in the $80 to $85 range in the next several years. natural gas on the other hand is underpriced. we cannot sustain our production, we cannot maximize production at a $4 number. there are just not that many areas that are attractive. there are some people, ceos, that if stays at that level the gas rig count will come down very quickly, very dramatically prices will stabilize and come back up. it's a short-term phenomenon. >> one of the things i saw this weekend was in a dallas paper that talks about exxon says the future may be natural gas and that's why they're buying xto but it's impractical to be powering trucks or cars in the future.
4:37 am
how could exon approach xto without thinking that's in the cards someday? >> because they recognize there's a tremendous amount of natural gas demand that is inherent in power generation. as utilities take a hard look at where they're generating electricity, they are looking, and you see this also by the announcement in colorado where utilities are announcing that instead of continuing to preserve the life of old inefficient polluting power plants, they're converting over to natural gas. so you don't even have to take a strong view on vehicles in order to have a strong view on natural gas because there's so much demand that's going to be there in the future for utilities to generate electricity. >> one last question, larry. i look at your balance sheet. it's probably the best i've ever seen it after this disposal. i see the price of natural gas. i wonder whether it doesn't make more sense to be able to buy a lot of stock back here rather than go and make an acquisition spree. >> well, our first priority is of course to develop the natural gas reserves that we had.
4:38 am
as we've said consistently, we have literally tens of thousands of undrilled natural gas wells that we can drill in north america, as well as oil prospects too. so our first focus is on growing production with the grassroots leases that we've established over a long period of time. that's where our greatest potential is. >> that's good to hear. >> you of course can look at share buybacks and look at acquisitions, and if they make sense, fine, but that's not the driver in what we're looking at. >> congratulations on that big sale on that big price. well done, sir. >> thanks. >> larry nichols, let me just tell you something, the guy has made us money. we're sticking with him. we're sticking with the group. do i speak that much about these? you heard about that transaction. you heard about what's in the future. i'll speak about it all i want provided we keep making money together. stick with cramer.
4:39 am
4:40 am
4:41 am
before we get to the "lightning round," there's something i want to say. ♪ hallelujah for the past five years i've had the privilege and honor of coming out here every night and doing this show. more than 1,000 shows. almost 1,200 shows. and i've got to tell you, i've got the most loyal and smartest
4:42 am
viewers in television. and i emphasize the smartest because i learn every night and they're call the cramericans. and i cannot wait for our big fifth anniversary tomorrow. we're celebrating with our greatest fans in studio 8h at rockefeller plaza in new york city. i don't want you to miss this show. i could barely sleep this weekend. this is all i could think about, and i hope to see you there. and with that it is time. it is time for the "lightning round" on cramer's "mad money." that's rapid-fire calls, one after another. you say the name of the stock, i tell you whether to buy buy buy or sell sell sell. can you believe i've been doing this for five years? and just to be clear i do not know the callers or questions ahead of time. my staff prepares the graphics on the fly. we play until we hear this sound, and then the "lightning round" is over. are you ready, skee-daddy? it is time for the "lightning round" on cramer's "mad money." why don't we start with denise in new york? denise! >> caller: hey, jim. a big high school boo-yah to you. >> holy cow. i wish i'd gone there. what's up? >> caller: i would like to know what you think the oracle corporation. >> i don't think larry or chuck, who i knew when he was on morgan
4:43 am
stanley, i don't think he'll come on the show. and yet i beg them to come on the show. why? because this oracle purchase of sun micro was genius. they're going to dominate cloud. mark, i don't mean to be attacking you because i think you're going to be a great cloud force. this was a brilliant move. but i think this stock goes to 30. buy, buy, buy. oracle's a winner. how about bo in cal? bo? >> caller: cramer, big boo-yah, man from southern beautiful california. >> all right, cowboy, hit me. >> caller: my stock is frpt, force protection. >> oh, geez, no, no, no! i want you to buy lll. that's right, lll. these three ls. yours had a spike on that quarter. let's just take it and run. use the steve miller philosophy. can i go to steve in ohio, please? steve? >> caller: boo-yah from ohio. how are you doing, man? >> what have you got? >> caller: first thing, my dogs
4:44 am
and i want to thank you for telling us information about pets. you saw what pets did today. they're good. my question to you is this. i invested a lot of money in ford. >> well done. >> caller: and i'm looking at s.o., southern electric. >> no, no. listen. speak who you pay for. i want you to go to first energy of ohio. f.e. that acquisition they're making is terrific. it's reduced the stock to have a better yield than the one you want. southern's too dependent on to coal. make that move. i want you to sell s.o. i want you to buy first energy. can i go to kim in indiana? kim! >> caller: hello, jim, and thank you for all that you do. happy boo-yah to you. happy five-year anniversary. >> kim sounds like she's from pawnee, indiana. could be. what's up? >> caller: i'd like to know you
4:45 am
what you think of capital source, csp. >> too risky. i can't do that to you, kim. i can't send to you something like that. that stock's had a big run. that is not my style. why not go on some bank of america like my charitable trust, i think you'll do better than that. can i go to lowell in south dakota? lowell! >> caller: professor skee-daddy! >> oh, man, i didn't know i had tenure. thank you for giving me tenure. that's good in some of those places where some of those professors come in with a -- you know what i mean? go ahead. >> caller: i'm a proud citizen of cramerica. >> thank you. i'm glad to have you on board. >> caller: i think u.s. steel is a sell. am i right? >> i don't know. that's too harsh. i can't say it's a -- i can't do that. they've got a good international business. mr. serma's done some good work in buying that kind of oil pipe that's an oil country tube. and i personally feel that the stock, down from 190, should never have gotten to 19. all that said, i would still buy
4:46 am
u.s. steel and buy nucor. dan d'amico's company because they have a lower cost base and i love that recent acquisition they just made. i like steel okay, letter x. i think that nue is the best. and happy birthday to us. stay with cramer!
4:47 am
4:48 am
4:49 am
the last thing we need right now is for the home builders to be making oodles of money at your expense, at the taxpayers' expense. but that's exactly what president obama and the bolsheviks -- and the democrats in congress never seem to get right. look, the democrats have ensured with a giant and hidden bailout to the home building industry tucked way in the bill extended to first-time home buyer just kicking in. now they ensured there be more homes built than we need. i think the whole thing is an
4:50 am
outrage. they may ends up causing hundreds of thousands of people to lose their homes. while the ultra rich home building execs get even richer at your expense and the people being kicked out. now, i am not opposed to federal handout for all industries. i think this tax break for the homebuilders is the dumbest and most counterproductive bailout. it is a bailout. it's never talked. we grill every banking executive. this one is never talked about. we are keeping the worst of the homebuilders alive and on life support. this country needs is for basic early-stage capitalists to take its course and the worst homebuilders to simply go under. instead, the federal government decided the homebuilders should be saved at the expense of the value of your homes and the expense of the people who are being foreclosed upon. you see, the homebuilders are now allowed to use losses that they incurred in 2008 and 2009 to retroactively offset the taxes that they are paid for any profits they booked in the past five years. imagine if you got that break? i have to thank frank, he pointed this out to me. that's how they were able to report better than expected
4:51 am
quarter march 2nd and earn $236 million. analysts were expecting $319 million loss. there is a nice swing. the taxpayers alone saved this company $291 million. kb homes saved $101 million. d.r. horton. holte got an $800 million tax credit. even though every single one of these companies had lost money in the previous 12 months before the tax benefit bailout, read the fine print, these companies had no earnings. but they lobbied hard. pulte spent $220,000 in lobby. they won in washington big. buy more land and build more houses. when we what we need for them to be building fewer homes. what every conference call to homebuilders talked about how they were buying land, some of them should be struggling to stay solvent or going under. it is okay. that's what happens in a capitalist economy. that's what is happening and we
4:52 am
just grill the banks. because of the tax break bailout housing prices can't lift. because every time they do these guys just build more homes. thank you, washington. thank you, mr. president. you guys brilliantly managed to hold home prices back, therefore causing more foreclosures than you can possibly can repair with those programs that ameliorate mortgage woes. i bet you weren't even trying. i bet you weren't even thinking. help the homeowners or help the homebuilders. one or the other. now we know which side congress and washington are on. if they let the darn homebuilders die, then that would have led to house price appreciation. we would have saved the taxpayer a fortune. this was just a handout, gift, and kept the most reckless homebuilders, including ones that made terrible loans to sell homes, alive. no scrutiny whatsoever! no grilling whatsoever! these are not businesses too big to fail. they are companies that not too weak not to fail. by allowing them to continue doing business and build homes, washington ensured it will take even longer for the value of your home to come back. that's what makes this bailout so outrageous.
4:53 am
news flash. some companies do not deserve to be saved. sometimes saving them hurts the rest of us. that's what i think the case of the homebuilders is. here is an example where capitalism left to its own devices would have been terrific for the poor people about to lose their homes. it's a travesty that no one in government seems to realize that it doesn't matter how much we redo mortgages to keep people in their homes, only house price appreciation will cure the problem. congress, by giving them the tax breaks, is its and your own worst enemy. $$$$$$$$$ñ
4:54 am
4:55 am
4:56 am
in case you haven't heard, "mad money" celebrating fifth anniversary tomorrow. get your favorite "mad money" moment vote-in. join in the rigor and the festivities. i'm jim cramer to see you tomorrow. ♪
4:57 am
4:58 am
4:59 am
welcome to the show. the headlines making news today out of the united states, investors are watching the language from the fomc to any clues t


info Stream Only

Uploaded by TV Archive on